Home Services Staff Resource Center Directions                Starting a New Business? > forms               Before the Internal Revenue Code can be applied to an entity, the entity must demonstrate that it actually functions as               the type of entity it claims to be.  It is not enough to have satisfied a state's standards of entity formation.  For tax               purposes, the predominant forms of business enterprise are C corporations, S corporations, partnerships, limited               liability companies (LLC), limited liability partnership (LLP), and sole proprietorships.  To choose between these is to               choose between significant differences in federal income tax treatments.               Corporations               C Corporations are subject to the toughest tax bite.  Their earnings are taxed twice.  First, a corporate tax is imposed               against its earnings and then, after the earnings are distributed to shareholders as individuals.  An S Corporation                is a corporation that has elected and consented to have the income and expenses "passed" through to its shareholders.                 The shareholders then must report the income and expense on their income tax returns.   For more               information on incorporating, click here or e-mail us to make an appointment for us to do it for you.  To make               the S Corporation election, click here.               Partnerships               A partnership is the relationship between two or more persons who join to carry on a trade or business, with each                person contributing money, property, labor, or skill and each expecting to share in the profits and losses of               the business whether or not a formal partnership agreement is made.  A partnership includes a syndicate, group,               pool, joint venture, or other unincorporated organization that carries on any business, financial operation, or venture,               and that is not a trust, estate, or corporation.  A noncorporate entity with at least two members can be classified               either as a partnership or as an association taxable as a corporation.   A noncorporate entity with one member               can be taxed either as a corporation or as a sole proprietorship.               Limited Liability Partnership (LLP) and Limited Liability Company (LLC)               A limited partnership is formed under a state limited partnership law and composed of at least one general partner               and one or more limited partners.  Generally, a partner in an LLP is not personally liable for the debts of the LLP               or any other partner, nor is a partner liable for the acts or omissions of any other partner.  A limited liability               company (LLC) is an entity formed under state law by filing articles of organization as an LLC.  Unlike a partnership,                 none of the members of an LLC are personally liable for its debts.  An LLC may be classified for Federal income               tax purposes either as a partnership, a corporation, or an entity.   For filing procedures when forming an LLC,               click here.   For filing procedures when forming an LLP, click here.              Sole Proprietorship              A sole proprietorship qualifies as a business if your primary purpose for engaging in the activity is for income               or profit and you are involved in the activity with continuity and regularity.  A sole proprietorship consists of one               individual.                                                                  611 North Tennessee Street   P.O. Box 473   Cartersville, GA  30120                                                                                                           Phone (770)382-3361     Fax(770)386-8382